ROI Calculator
$
The total amount invested
$
The total amount returned from the investment
About ROI Calculation
ROI (Return on Investment) is a performance measure used to evaluate the efficiency and profitability of an investment. It's one of the most popular metrics used in finance and business to compare the profitability of different investments.
How ROI is Calculated:
ROI = (Gain / Cost) × 100
Gain = Return Amount - Investment Cost
Example: If you invest $10,000 and get back $15,000:
Gain = $15,000 - $10,000 = $5,000
ROI = ($5,000 / $10,000) × 100 = 50%
Interpreting ROI:
- Positive ROI: The investment made a profit
- Negative ROI: The investment resulted in a loss
- Higher ROI: Better investment performance
- 0% ROI: Break-even (no profit, no loss)
Common Uses:
- Evaluate business investments and projects
- Compare different investment opportunities
- Assess marketing campaign effectiveness
- Measure real estate investment performance
- Analyze stock and portfolio returns
Important Notes:
- ROI doesn't account for the time value of money
- It doesn't factor in the risk associated with the investment
- For time-sensitive comparisons, consider annualized ROI
- Always compare ROI with similar types of investments
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